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Medtronic's Endurant II in Europe - Analyst Blog

Leading medical devices player,
Medtronic
(
MDT
) announced the receipt of CE Mark followed by the launch of
Endurant II AAA stent graft system in the international market. The
launch of this device will enable physicians to treat patients with
abdominal aortic aneurysms ("AAA") through minimally invasive
endovascular aortic repair ("EVAR").

Endurant II has been developed in collaboration with more than
250 physicians from across the world. It is the advanced version of
the currently available Endurant stent graft platform with
additional design features that enhance its ease of use. In the US,
Medtronic expects to receive approval for Endurant II in 2012.

The AAA condition leads to weakening in the body's main artery,
aorta that crosses through the abdomen. Development of the device
will be of immense benefit to the patient population as AAA is
often labeled as the "silent killer". This is because AAA often
does not give rise to symptoms until rupturing, which usually
results in death.

Medtronic has been recording robust growth in its Endovascular
and Peripheral business based on strong performance of the original
Endurant system since it received approval from the US Food and
Drug Administration (FDA) in December 2010.

Medtronic's CardioVascular segment has been a point of focus for
the company and has lately been recording impressive growth. During
the most recent quarter, this segment reported revenues of $830
million, up 12% year over year (up 8% at CER) driven by growth from
Coronary (up 7% to $376 million or 3% at CER), Structural Heart (up
12% to $266 million or 8% at CER) and Endovascular & Peripheral
(up 25% to $188 million or 20% at CER). Revenues increased 6% in
the US with 9% growth in international markets.

Over the last few quarters Medtronic reported weaker sales from
its two largest segments - defibrillators and spinal implants. The
challenges witnessed in the US ICD market have also been felt
across the board and impacted Medtronic's competitors,
Boston Scientific
(
BSX
) and
St Jude Medical
(
STJ
).

To overcome these challenges, Medtronic is trying every means to
revive growth. This includes penetration of international markets,
portfolio expansion, focus on high-potential segments and
restructuring initiatives. These should benefit the company over
the long term.

Medtronic currently retains a Zacks #3 Rank (short-term Hold
rating). We also maintain our long-term Neutral recommendation on
the stock.

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